Sunday, 20 November 2011

Europe: Technocracy or democracy?

George Papandreou, the Greek prime minister andSilvio Berlusconi, his Italian counterpart, have been in a political fiddle forsome time now. Mr Berlusconi has been heavily criticised for his monopoly overthe Italian media and his premiership has been plagued by sex scandals. MrPapandreou’s austerity programme led to a wave of nationwide strikes and created divisions in even the upper-most echelons of government.

Nevertheless, their recent resignations were nodoubt triggered by the ultimatum put to them by euro-zone leaders at the G20summit in Cannes: either reform your economies or clear your desks. MrPapandreou was told to approve the latest European bail-out deal or lose hisloans, while Mr Berlusconi was instructed to allow IMF supervision of hisreforms.

Although the European Union (EU) has longinfluenced domestic policy, the intrusion of euro leaders into the internalpolitics of Italy and Greece is unprecedented in terms of the scale and urgencyof demands. The age-old debate over whether the EU is an intergovernmental orsupranational organisation has resurfaced.

As decisions are increasingly migrated toBrussels, many voters feel distanced from, and powerless before, those draftinglegislation to which, as citizens, they must abide. But, if the increasedpowers afforded to Brussels under the Lisbon treaty weren’t enough, the veryfabric with which Western nations have sewn their political structures, namelydemocracy, is under siege.

Both Italy and Greece are now led by governmentsthat their citizens did not elect. Athens, the city from whence democracy isbelieved to have originated in 507 BCE, is now led by Lucas Papademos: aneconomic expert he may well be, but elected by popular suffrage, he mostcertainly is not. All of this after his predecessor’s term was brought to apremature end because Mr Papandreou dared to suggest giving the people a say onausterity, by means of a referendum.

Although we are betraying democratic principleswhich, as Western citizens, have been sold to us as the fairest form ofgovernance, might technocracy be the only answer in such challengingtimes? Currently, Italian 10-year bondyields are above the 7 per cent mark; a level that previously drove Portugal,Greece and Ireland to seek European bailouts. If Italy goes under, so too maythe rest of the euro-zone. Decisions as urgent as these cannot afford to sit onthe shelves of 17 national parliaments before consensus is reached.

Might, in certain situations, technocracy be just?Both Italy and Greece chose to join the single currency, and in doing so,agreed to a number of spoken, and unspoken rules. In any union, recklessness byone member endangers the existence of others. If Italy and Greece had not amassedsuch debts over years of poor financial governance, they would not beexperiencing such difficulties today. Should not those countries that providefinancial help to the union’s ailing members have a right to impose conditionsupon the loans?

In the long-term, some forms of technocracy are also necessary. Independent institutions, such as the unelected EuropeanCommission are needed to provide stability and consistency as power switchesbetween different political parties. Such independent institutions are alsopreferable to an intergovernmental body dominated by a few powerful members,such as Germany and France.

Nevertheless, the technocrats also have theirlimits. Economics, although often presented as such, is not a science. Itsapplication has such profound implications for people’s lives, thatmacroeconomic decisions, whether made by elected politicians or by technocrats,will always be politically contentious.